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Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : HANNOVER, GERMANY
Tarikh/Date : 20/03/98
Tajuk/Title : THE MSC INVESTORS CONFERENCE IN
CONJUNCTION WITH CEBIT
1. I am delighted to be here at CeBIT '98, which is
one of the world's largest and most prestigious I.T.
fairs, where companies from all over the world gather to
showcase all the latest innovations and technologies.
Being somewhat of a 'technology buff' myself, I am looking
forward to visiting the pavilions, as well as meeting the
leading players in the German I.T. and multimedia
industry.
2. Three main elements have brought mankind to the
threshold of the Information Age -- rapid advances in
global communications, the Internet and convergence of
technologies. The Internet has matured substantially, not
only as a major communications tool and source of
information, but as the medium for electronic commerce.
Over the years, it has evolved in terms of size, global
reach and accessibility. Researchers have estimated that
in 1997, there were 54 million Internet users worldwide,
while Internet services constituted a US$35 billion
market. Demand is expected to grow rapidly, with not only
mass-market penetration of the Internet continuing, but
the adoption of a diversity of services within the
Internet also growing.
3. Advances in global communications, too, has led us to
new frontiers in the borderless world. In the past,
telecommunications services were linked to a specific
infrastructure. Today, voice, date and video services can
be transmitted at very high speeds, over any kind of
network -- fixed, wireless, satellite or a combination of
these. With the convergence of technologies,
telecommunications, media and I.T. companies are now able
to offer new services outside their traditional business
sectors. The convergence of technologies is also driving
the convergence of industries into a common 'electronic
business system' with functionalities that facilitate
borderless businesses.
4. Needless to say, Information Technology, which is the
foundation of the new digital economy, is moving literally
with the speed of light. The magnitude and impact of the
growth has far-reaching implications, opening up endless
opportunities and undreamed of options for businesses to
explore. I'd like to share with you this morning some
thoughts about the forces that will shape our common
digital future -- the promise it holds and the strategic
response we in Malaysia are making to take advantage of
that promise.
5. In Malaysia, we have taken a pragmatic approach to
enter the Information Age. We realised that an I.T.
Agenda is the sine qua non to realise our goal of becoming
a fully-developed nation by the year 2020. Studies have
shown that in order to reach fully-developed nation
status, our annual growth rate has to average seven
percent a year until the year 2020. It is expected that
the manufacturing sector's contribution to the GDP will
peak at around 38 percent by the year 2005. We therefore
need a second engine of growth for the economy. We
believe that this will come from a thriving I.T. and
multimedia industry which will, in turn, fuel productivity
in other industry sectors.
6. Among others, our I.T. Agenda outlines various
strategies which will help us achieve a knowledge society
through the development of people, infrastructure and
applications. We have started building the foundation to
support this knowledge society, and this is in the form of
the Multimedia Super Corridor, or the MSC, which is our
first major investment for the future. For us, this will
be primarily the vehicle for our country's entry into the
Information Age.
7. The MSC is not just a physical location, or just
another industrial or technology park -- and it is not a
Far Eastern imitation of the Silicon Valley -- it
represents a new paradigm in the creation of value for the
Information Age. The MSC is envisioned to be a hi-tech
test-bed that will allow companies to explore multimedia
technologies without any limitations. It aspires to be a
global centre for the applications and testing of leading-
edge I.T. advances and discoveries.
8. To you, this may seem somewhat audacious on the part
of a small developing country. We are the first to admit
that we are only just taking our first steps into the
complex and sophisticated world of multimedia -- but we
can provide an ideal environment for technology to
flourish. In fact, being a developing country helps. We
offer a green field site, unencumbered by industrial
practices and legacies or entrenched interests -- a site
dedicated to the full application of I.T. in the new age
electronic commerce.
9. We have before us the example of Britain and the
United States of America, one fathered the Industrial
Revolution, while the other brought it to its full
development. America was then one huge green field site --
providing the optimum conditions for technology and
business to flourish, to fulfill the promise of
Industrialisation. We have taken this as a model. In a
modest way, we too, hope to assume a catalytic role. Our
task will be to create an ideal environment for I.T. and
multimedia, one which will encompass the physical,
economic, regulatory and policy framework that will
unleash the creative dynamics for innovation and advances
in this field.
10. For a country like Malaysia, which is far less
developed in terms of the multimedia, this will demand
one giant technological leap. We have a lot to learn.
This is not something which we can embark on our own. For
that reason we turn to you and others like you. We can
only do it in mutually beneficial partnership with world-
class companies from all around the globe. At the same
time, we hope to help our own I.T. and multimedia
companies become world-class over time. It is a smart
relationship that will hopefully lead to the development
of many, new and innovative multimedia products and
services in the future. We invite you to bring your hi-
tech operations, your R&D, your I.T. know-how to
experiment and to try on your own or alongside Malaysian
companies in the MSC. In order to create this multimedia
haven, we need a cross section of telecommunications
companies, content providers, and software developers.
11. The MSC will be a 'web' of collaborating companies in
the I.T. field -- a multi-cultural web of mutually
dependent international and Malaysian companies
collaborating to deliver new products and new services
across an economically vibrant Asia and beyond. And like
a spider, it will weave ever more intricate webs of
relationships and create synergies amongst participating
companies. Such a web could be the new model of
development for the Information Age.
12. We have already promoted our vision of this
multimedia haven in Hollywood, Silicon Valley, the United
Kingdom, Japan and Canada, where it received a heartening
response. We have special reasons to hope that more
European companies will soon be represented in the MSC,
along with our other distinguished pioneers.
13. Siemens, which has been in Malaysia for a long time
and is now one of its leading corporate players, is
already involved in the MSC. Its Chairman, Dr Heinrich
von Pierer, sits on the MSC's International Advisory Panel
set up to counsel Malaysia on the development of the MSC,
together with other leading I.T. players from around the
world. The Multimedia Development Corporation, which
oversees the development of the MSC, is currently
evaluating a few MSC status applications from German
companies, and are talking to several more during this
visit. Several site visits have also been planned.
14. We see a lot of strengths in the German I.T. industry
which will facilitate its expansion and globalisation
efforts. It is now as well-positioned as the largest
market for information products and services in Europe.
It also has many strengths in the telecommunications
sector, having the largest digital network in the world,
the latest technology in mobile communications, the
largest telecommunications company in Europe and the
second largest in the world after AT&T.
15. Yours is a country renowned for technological
innovations, and we look to you for technological
transfers. However, whilst continuing to rely on the
transfer of technology, we are getting even more
ambitious. We do not want to be just passive recipients,
but active participants -- and with the help of people
like yourselves, we have set ourselves the goal of
developing new technologies indigenous to Malaysia,
specifically, we are hoping to attract R&D operations. We
want to be part of the industry's world wide endeavour to
develop intelligent multimedia solutions to manage today's
exploding range of information options. Hopefully when
the world gets the next generation of hi-tech start ups,
Malaysia would be there.
16. We look forward to expanding our business links with
you. In particular, we commend to you the ample business
opportunities presented by the MSC. What we are
proposing is a smart partnership. It is presented not
just as an exciting and innovative idea, but as a
carefully conceived and sound business proposition.
17. In physical terms, the MSC is a relatively large area
15 km by 50 km. By concentrating I.T. and multimedia
operations in one dedicated area, a very special
environment can be created, facilitated and more
efficiently managed. The Corridor begins at the Petronas
twin towers, currently two of the world's tallest
buildings. It runs south down to the new Kuala Lumpur
International Airport, which when it opens in June this
year, will be the most advanced in the Asia Pacific region
and will become a regional communications hub.
18. Two futuristic, intelligent cities -- Putrajaya and
Cyberjaya -- will form the nuclei of the Corridor.
Putrajaya is the country's new administrative capital; the
other is a cyber city -- a haven for I.T. companies
providing operational quarters for multinationals to
direct their worldwide manufacturing and marketing
activities in multimedia, as well as their production and
marketing of multimedia products and services.
19. It is not easy to describe in a few words the wide-
ranging concept of the MSC. It will be purpose-built with
the intent to provide a fertile base for business to focus
their unique skills and resources to develop the new age
communications industry. It will have to incorporate many
technologies, as well as a technology-oriented and
business-focused setting. We hope the closeness of the
companies to one another will enable a strong
collaborative environment to be created that will
encourage linkages. But we are not just talking buildings,
facilities and systems. The idea is to provide both the
physical and the psychological space for creativity. We
see the MSC as a place of enquiry and of intellectual
curiosity. The concept is not new. The Cavendish
Laboratory at Cambridge is just such an assembly of
scientific intelligences. It has produced some of the
world's greatest physicists. The MSC, being more business
oriented, will be developing the practical applications of
the multimedia for commerce and to meet the business and
personal needs of the 21st century knowledge worker. It
will be a global test-bed where new technologies can be
spawned and tried out.
20. Putrajaya, the new administrative centre will be a
test-bed for Electronic Government -- providing companies
with the opportunity to provide and validate a near-
paperless bureaucracy under the conditions of a real
Government environment. Social research will be included
-- testing the implications for society of instant
unlimited information.
21. Cyberjaya will provide the physical setting -- 7,000
hectares of lush green tropical forest, palm oil
plantations and rolling countryside. Much of the green
space will be preserved. The Malaysian Government will
provide the incentives, groundbreaking cyberlaws, business-
friendly policies and regulations. The private sector, it
is hoped, will seize the entrepreneurial opportunity.
22. To test out this vision, we convened the first
meeting of the International Advisory Panel for the MSC at
Stanford University, California. Industry leaders of
worldwide repute, subjected the proposal to the most
stringent evaluation. We are talking of people like Jim
Barksdale (Netscape), Bill Gates (Microsoft), Scott
McNealy (Sun) and many others. They gave it an
enthusiastic thumbs-up. This, I feel, is due mainly to
the fact that in addition to its intrinsic merit, we were
serious about removing the outdated obstacles that
Industrial age policies, laws, practices and attitudes had
posed for them. The panel met again last month for the
second time at the MSC headquarters in Cyberjaya.
Progress was evaluated and the next forward steps were
recommended. Various cross-border issues, especially
those pertaining to electronic commerce, were also
discussed. The members were impressed with the progress
to date, and re-affirmed their support and confidence.
23. Work is already well underway at the MSC and is one
year ahead of schedule. The 'hard' infrastructure is being
put into place on a fast track basis. Response has been
beyond our expectations and to date, we have given MSC
status accreditation to 110 companies, out of which 84 are
already in operation. We have, since April last year,
received a total of 180 applications for MSC status, out
of which 34 percent are from foreign companies, 43 percent
from Malaysian companies, and 23 percent from joint
ventures between Malaysian and foreign companies. 12
percent of the applications from foreign companies are
European.
24. Barely a year since we first launched the MSC, we are
already beginning to see the value created from the
Information Age business. Multimedia Development
Corporation statistics on the MSC-Status Companies show
increased investment in high value-added activities, with
revenue to investment ratio of approximately three to one.
For all the companies which have applied for MSC status,
the combined revenue projected by the fifth year of
operations is around 13 billion Ringgit, while projected
profit for the same period is close to five billion
Ringgit. This is on the back of an investment of around
four billion Ringgit. There are also signs showing the
formation of new services-based industry clusters,
specifically in software development, content creation,
animation and broadcasting, and telecommunications.
25. Additionally, based on all the MSC applications
received, knowledge worker requirement by the fifth year
of operations stands in excess of 23,000. Recognising
this need, we have recently extended MSC status
accreditation to institutions of higher learning as one of
the measures to help fulfil the companies' human resource
needs.
26. However, we see the 'soft' infrastructure as the area
where we probably need to innovate most. The Malaysian
Government, always business-friendly and accustomed to
dealing with foreign investors, promises to be even more
friendly to the people of the MSC:-
- Knowledge workers who fall within the category of
special guests will get in and out of the Corridor without
hassle or delay, with multiple entry visas;
- We will allow 100 percent ownership of companies and
unrestricted employment of knowledge workers from abroad;
- Incentives are generous with up to 10 years tax
holiday;
- We will not censor the Internet -- but of course, if
you download, and distribute certain undesirable illegal
material, pornography for example, you will be subjected
to the usual laws of the country;
- Companies will find a breath of fresh air coursing
through the regulatory system. Bureaucratic procedures
will be reduced to a minimum. Official requirements will
be few and approvals expedited for work permit
applications;
- A one-stop agency system will streamline the entire
process, handled by the Multimedia Development
Corporation, to whom all your enquiries should be
directed. This is where you obtain any official sanctions
you may need;
- We have dispensed with the traditional and often
cumbersome tenders in favour of 'concept proposals', again
simplifying the whole procedure.
27. We recognised early on the importance of intellectual
property rights and the need for a special category of
Cyberlaws. The Multimedia Convergence Act 1997, already
on the statute book, is designed to support companies
engaged in electronic commerce and to resolve some of the
issues due to the convergence of the communications,
computing and broadcasting industries.
28. Cyberlaws already tabled in the House take the
regulatory and legislative controls further than any tried
before -- a brave attempt to deal with computer crimes,
illegal access, commercial espionage and theft, methods of
validating digital signatures and computer transactions,
together with a host of other protections not covered by
existing laws. We realise at the same time that Cyberlaws
for new usages of multimedia as well as new technologies
will pose fresh problems. But there is sufficient legal
framework already in place to raise the comfort level of
would-be investors and to make Malaysia a regional leader
in intellectual property protection.
29. At the same time, we realise that a concern of the
private sector is that Government does not always
understand the reality of operating a business on the
ground, in terms of operating conditions and constraints.
In Malaysia, we have a highly developed process of
consultation with private enterprise which was built into
the development of the MSC from the outset. MSC-Status
Companies have direct access to me, as the Chairman of the
MSC Implementation Council and International Advisory
Panel, and to the Deputy Prime Minister who heads the
Founders Council.
30. All that remains is a forward look. Phase Two of the
MSC project will see the Corridor linked to other cities
in Malaysia and around the world. By then, we expect in
excess of 250 companies within the MSC. By the year 2020,
the entire country will be a Multimedia Super Corridor
with a total of at least 12 intelligent cities linked to
the global information super highway and thus becoming a
link to all the other intelligent cities worldwide. MSC
participants will have risen to 500 world class
enterprises.
31. It will even have a Cyber Court of Justice. And in
terms of social concern, we hope that in addition to it
being a test-bed for new technologies it will help to
develop and influence the new culture of global
information, grappling as we must with the conflict
between control and licence and offsetting the adverse
social effects of a massive unremitting onslaught of
instant, uncensored information.
32. What we are offering may not be new in technological
terms but we believe that this initiative is organised on
a scale and is of a comprehensiveness hitherto unrivalled.
When we invite you to participate, it is first as a matter
of collective self-interest. Quite simply, we think it is
a good deal for all, for you and for us.
33. We therefore invite you, Ladies and Gentlemen, to be
with us as we seek to catch the dawn of the 21st Century.
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